Conflict of interest rules: builders/developers

Professional Practice Committee agree relaxation to the conflict of interest rules where solicitors provide only an estate agency service to a builder or developer

The Journal, March 2003, page 9

Rule 5(1) of the Solicitors (Scotland) Practice Rules 1986 (Conflict of Interest Rules) provides that where the seller of residential property is a builder or developer a solicitor will only be able to act for seller and purchaser where the purchaser is an associated company or where the parties are public authorities, public bodies, Government departments or agencies. From the time that the Rules came into force the Professional Practice Committee have been of the view that acting for the seller as estate agent only is acting at a stage for the seller even if all offers are to be submitted to a different firm of solicitors.

The Committee have recently reviewed this policy and have agreed that it can be relaxed where the solicitors are only providing an estate agency service to a builder or developer in respect of properties being sold at a fixed price with a standard missive which will be submitted to and negotiated with a different firm of solicitors. In these circumstances if an established client of the firm wishes to purchase one of the plots or houses the Committee will normally be willing to grant a waiver provided that the solicitors themselves are satisfied that there is no actual conflict of interest between the parties and no advice on the value or price will be sought by the developer from the solicitor acting as estate agent. Requests for such waivers should be addressed to Bruce Ritchie, Director of Professional Practice at the Law Society of Scotland.

It should be stressed that this is not a change in the Conflict of Interest Rules themselves and they remain in full force and effect.